Councils have denied ‘sitting on’ millions of pounds of Section 106 money intended for social and community projects.

Freedom of information requests to all 353 local authorities in England by the BBC found that £421m had not yet been allocated to future schemes and over the past five years £9.8m had been returned to developers.

But chairman of the Local Government Association’s environment and housing board, Mike Jones, stressed that the process behind assigning Section 106 money was ‘complex’.

Cllr Jones said: ‘This is all about making the right long-term investment decisions to deliver the services that communities desperately need.

‘It is utterly wrong to say councils are sitting on it.’

The Home Builders Federation, which represents the industry, said the figures showed the ‘huge contribution’ development makes to local authority budgets.